HIDDEN COSTS Export financing can pay for itself in countries where the export climate is favorable. In some countries such as China, where the economics currently work against U.S. exporters. U.S. exporters are at a disadvantage.

Texports

PORT OF GALVESTON

As the Nation’s top-exporting state for the past 14 consecutive years, it’s impossible to deny the importance of Texas logistics to the global economy. In fact, according to Texas Comptroller Glenn Hegar, in 2015 alone Texas ports facilitated almost $650 billion dollars in trade, both directly and indirectly supported almost 1.6 million jobs, and contributed $224.3 billion dollars to the state’s GSP.

With hundreds of EDCs, 29 ports , thousands of logistics providers and 117 airports in the State of Texas all playing a vital role in the state and global economy, a port and community stand out from the rest as being unique in their opportunities, operations and services. The Ports of Galveston and Port Arthur EDC fulfill two different types of services that help make up the fabric of the Texas logistics tapestry. Take a closer look at a stand out port and economic development corporation and everything they have to offer logistics companies looking to break into the Texas market.

Port of Galveston, Texas

When the historic Port of Galveston, Texas was built in 1825, it wasn’t even a part of the United States. That’s because back then, the port and much of its surrounding land was still part of Mexico. The port was officially incorporated to The Republic of Texas in 1839, along with over 4,600 acres of land purchased from the Mexican government by a French-Canadian businessman named Michel Branamour Menard, who purchased the land for $50,000 in 1836.

Today the Port of Galveston has the distinction of being the oldest port in the Gulf of Mexico, west of New Orleans, Louisiana.

Initially built to export cotton, today the Port of Galveston is largely diversified.

“Right now, about 60 percent of our revenue comes from cruises,” explains Port Director Rodger Rees. “But it also has a vibrant cargo business which is varied. We’ll get anything from BMW’s to breakbulk to the 1600 wind turbines that are coming through right now.”

The north side of the port even houses a Texas A&M maritime campus which Rees says is one of only a few in the United States. Further down, the port is home to many oil and gas business tenants.

Located on the 2000-acre Pelican Island, the port is considered a utility by the City of Galveston and is run independently as an enterprise fund. Galveston owns 25 percent of Pelican Island, which it shares with the city of Houston and several other private entities.

Rees says what makes the Port of Galveston such an excellent location for logistics in the State of Texas is its prime location.

“We are located right at the mouth of Galveston Bay. Forty miles to the north is Houston, which is the fourth-largest city in America. We have a huge market for goods and services going into Houston.”

Another benefit to the port’s location its in-place infrastructure. Commodities coming into the port can be trucked out via north and south interstate highways, and the port has its very own rail line that services all the other local rail lines.

“There are other ports in the area, but their rail access is 20 or 30 miles away. Ours is right on the port,” says Rees.

But for Rees, it’s the cruise business that has the biggest potential.

“For a cruise business, the port is important because we’re a tourist-friendly city. We have tourist attractions on the beach and an amusement park on the pier. It’s a great place to take cruises from. People come in early or leave late to see the city and take a cruise,” Rees explains.

The port is currently the fourth-largest cruise port in the United States, and is currently serviced by Royal Caribbean, Carnival and Disney, which are all home-ported in Galveston.

“I come from Port Canaveral. I was the CFO there. That’s the number two port in the US,” says Rees “What attracted me to Galveston is the opportunity here. We are growing. We have land. We have a port people really like to cruise out of. The challenge I took was to develop that cruise business and expand the cargo business. It’s a really exciting opportunity, because we have the support of the local governments. It’s a great challenge, but an even greater opportunity.”

Port Arthur, Texas has a problem … and no, it has nothing to do with Hurricane Harvey which it survived and quickly moved on from because that’s how they roll in Port Arthur.

“[After the hurricane] people would ask me when we would be open for business again,” said ReNonda McClain-Lee, Port Arthur Economic Development Corp., marketing manager. “I’d tell them ‘Now! We’re open for business now!’ Our door has never closed. Never.”

Because of that fact, attracting, keeping and expanding businesses is not a problem for Port Arthur, though it has created one, put simply here by Port Arthur EDC CEO Floyd Batiste: “We have more jobs than people.”

Over the years, Batiste’s organization and Port Arthur’s overall reputation for an enthusiastic, collaborative business environment has attracted businesses of all shapes and sizes some attracted by inexpensive land, some by its busy and eponymous port and four Class 1 railroads, others by the 500-acre business park–shovel ready with utilities, fibre optics, security, etc.–and still others by the area’s standing as the nation’s leading petrochemcial hub complete with a spaghetti bowl system of pipeline that reaches well out into the nation.

So, Batiste said, the Port Arthur EDC’s main focus is not so much about bringing businesses here but about “supplying those businesses with trained workers. And just as importantly, with supporting that secondary market of folks that serve the petrochemical industry.”

That industry has been arriving and expanding at a rate and scale too voluminous for this space but just know that when French concern Total announced a venture to build a $1.7 billion ethane steam “cracker” and polyethylene unit, it was impressive but rather dwarfed by Saudi Aramco’s announcement that it intended to invest $12 billion to expand its Motiva refinery facilities in Port Arthur, already the U.S.’s largest.

“And we have Valero here, they are also looking into expansion,” Batiste said. “And we have the French company [Total] going through the process to start expansion and Sempra California is going the permitting process of starting LNG facilities and … “You get the idea.

“One of the big issues we have here is because of the amount of expansion and growth, we spend a lot of time and money training folks,” Batiste said.

Local officials have been working with nearby Lamar University as well as workforce development agencies to get people ready to work and meet the demand. Those demands come with significant rewards.

Since there are demands not only to construct these new and/or expanded facilities, there are demands not only for construction jobs, but jobs to maintain and repair them as well as, of course, actually run them. All of that work valued and skilled and, in many cases paying around and upwards of $100,000 a year.

And people filing those secondary/support businesses in the region have been benefitting as well. You may remember stories a few years back of similar employment gaps in North Dakota where even entry level fast food workers were making close to double the minimum wage. Such a situation exists now in Port Arthur with high wages stretching even farther because of the area’s low cost of living and there being no state income tax.

Add to that the fact that workers will be entering a business climate that was actually made stronger by Hurricane Harvey.

“I’ve been excited to see that, after the storm, all of us, in all different areas and organizations, have actually grown closer to make things happen,” Batiste said. “We’re working much harder together to solve issues, to make our communities stronger. We’re much more interconnected.”

If someone were to want to connect with what’s going on in Port Arthur, Batiste suggests it may be best to register with your local workforce organization to get informed of who is hiring and when. Of course, someone is always hiring, as McClain-Lee says, that door never closes. Never.

Batiste knows that. When it was suggested to him that articles such as this one may soon send a torrent of enthusiastic workers his way, he reacted with a virtual kid-on-Christmas giggle.